Trading Companies, Portuguese

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Trading Companies, Portuguese

In the seventeenth and eighteenth centuries the Portuguese crown established several monopoly trading companies to control and stimulate trade between Portugal and Brazil. They included the Brazil Company (Companhia Geral de Estado do Brasil), created in 1649, transformed into a government agency in 1663, and dissolved in 1720; the Maranhão Company (Companhia de Comércio do Estado do Maranhão), 1682–1685; the Grão-Pará and Maranhão Company (Companhia Geral do Grão-Pará e Maranhão), 1755–1777; and the Pernambuco Company (Companhia Geral de Pernambuco e Paraíba), 1759–1777. The fundamental purpose of the Brazil Company was to protect trade with Brazil, while the three other companies were to supply African slave labor and stimulate production and trade in their respective regions.

THE BRAZIL COMPANY

The Brazil Company was established on the model of the Dutch and English chartered trading companies to protect Brazilian colonial trade from the depredations of Dutch privateers. The company was required to provide thirty-six warships to convoy merchant fleets between the ports of Lisbon and Oporto in Portugal, and Bahia, Rio de Janeiro, and Recife (after recapture from the Dutch in 1654) in Brazil. In return, the company was given a monopoly over all imports of wine, wheat flour, olive oil, and cod into Brazil for sale at prices it could set itself. Moreover, the company collected taxes on the sugar, tobacco, cotton, hides, and other commodities it transported from Brazil to Portugal. Shares in the company were exempted from confiscation by the Inquisition or any other court, and much of the capital was raised (under pressure) from New Christian merchants, descendants of Jews required to convert to Catholicism in 1497.

Although the company was somewhat successful in reducing the capture of ships in the Brazil trade, it came under increasing criticism. Some complaints focused on the protection given to New Christian capital, but smaller Portuguese ports and merchants, who were cut out of the Brazil trade, and Brazilian colonists also criticized its operations. Price increases and inadequate supplies of the monopolized staple foods, along with irregularity of the fleets and consequent spoilage of Brazilian commodities, were the major complaints.

In 1658 the monopolies were abolished and the fleet system modified to require only return sailing from Brazil in one annual convoy. The next year company shares were made vulnerable to confiscation by the Inquisition. Shareholders were compensated and the company was incorporated into the government as a royal council by 1663, continuing to provide convoy services in this form until it was dissolved in 1720.

THE MARANHÃO COMPANY

The short-lived Maranhão Company, organized in 1682 with a twenty-year charter, was intended to stimulate export-crop production in the sparsely settled northern captaincies by providing African slave labor and regular transport to Portuguese markets. Company abuses of its monopoly privileges combined with resentment of Jesuit activities ignited a revolt by colonists that resulted in the dissolution of the company in 1685.

THE EIGHTEENTH-CENTURY COMPANIES

In the eighteenth century, two monopoly trading companies were established as part of the Marques de Pombal's policy to revive and restructure the Portuguese imperial economy. The Grão-Pará and Maranhão Company was designed to stimulate economic development in the still-languishing Brazilian north, while the Pernambuco Company was to revive the economy of that once-prosperous region—in both cases through the introduction of greater supplies of African slave labor, the purchase of traditional and new export crops at good prices, and their transport to Portugal in armed convoys. The companies were also expected to develop colonial markets for Portuguese manufactures. By the 1770s, the Grão-Pará and Maranhão Company was also being used by the crown to expand its military and bureaucratic presence in the Amazon region.

The Maranhão Company was effective in enlarging the supply of African slaves to the north, stimulating greater production of traditional exports, such as cacao, and diversifying export production in Maranhão to include rice and cotton. The Pernambuco Company expanded exports of sugar and hides in Pernambuco, but there was no significant diversification of exports. Both companies provided more regular transport links and funneled large amounts of Portuguese manufactures to colonial markets.

The companies' monopolistic domination of their respective regions' economies produced widespread criticism, especially in Pernambuco. Opponents took advantage of Pombal's fall from power in 1777 to seek the dissolution of the companies that were so associated with his authoritarian rule.